Question: Does the sinking value of the Mexican peso pose economic problems for the local and national economy?

Phil Blair

Phil Blair, Manpower

Yes: Especially San Diego and every other U.S. city that borders Mexico. We get a subtle but very large influx of business, many times in cash, from Mexican citizens coming across the border to shop. And not only barely across the border for basic goods but well into Fashion Valley and UTC malls for expensive goods. Besides the actual purchases, which keep some San Diego stores in business, but also sales taxes, and even TOT (transient occupancy) taxes flow into city coffers. We clearly want the Mexican peso to be low for U.S. purchases and travels but not too low that it begins to affect their U.S. purchasing power.

Kelly Cunningham

Kelly Cunningham, National University System

He is not participating this week.

David Ely

David Ely, San Diego State University

YES: The decline in the value of the peso, relative to the U.S. dollar, will cause some Mexican companies importing U.S. products to seek out cheaper alternatives. According to the U.S. Census Bureau, U.S. exports of goods to Mexico totaled $236 billion in 2015, so the impact of this substitution could be significant. A diminished peso will also cause some border residents to shift their purchases away from U.S. retailers and toward those in Mexico.

Gina Champion-Cain

Gina Champion-Cain, American National Investments

YES: The peso has lost a quarter of its value in the last six months. Mexican purchasing power has been crippled, reducing U.S. exports and San Diego retail sales. The pressure has caused distress from Mexico City to San Ysidro. Gas, electric and water costs have increased 20 percent. Protests have erupted; uncertainty is at an all-time high. The macro repercussions of a weakened peso are all negatives for our local and national economy.

Alan Gin

Alan Gin, University of San Diego

YES: The falling value of the peso makes U.S. products more expensive in Mexico and could lead to reduced purchases. This would have significant impact on the national economy as Mexico is the second largest purchaser of U.S. exports after Canada. A reduction in exports could in turn lead to job losses in exporting industries. As a border city, San Diego will be affected as many Mexicans cross the border and spend money on retail goods, restaurants, etc.

James Hamilton

James Hamilton, UC San Diego

YES: At least for San Diego. Spending in San Diego by Mexican residents makes an important contribution to our economy. This will be discouraged both by the strong dollar and by the economic fundamentals behind the weak peso. The weak peso in part reflects concerns about Mexican GDP in the face of moves to discourage Mexican manufacturing. Moving jobs back to the U.S. may help other parts of the country, but I don’t expect it to help San Diego.

Gary London

Gary London, London Group of Realty Advisors

YES: It poses problems for both. For the local economy, billions of dollars in retail and trade flow to the San Diego region from Mexico. Our relationship with Mexico in many ways defines our San Diego regional economy. A peso devaluation and, incidentally, the surge in oil prices there, will reduce expenditures in our region. Nationally, trade with and through Mexico is impacted.

Norm Miller

Norm Miller, University of San Diego

He is not participating this week.

Jamie Moraga

Jamie Moraga, IntelliSolutions

YES: Mexico’s the third largest trading partner of the U.S. We not only import from Mexico but they buy the fourth largest quantity of U.S.-made products. With one Mexican peso currently equaling 4.7 U.S. cents, U.S. products and services are unable to be competitive. With skyrocketing fuel prices, increasing inflation, and ongoing demonstrations it’s unlikely to get better in the near term for Mexico and the peso. Due to our proximity, this could impact our local economy with a ripple effect to our national economy. [Note correction in peso value due editing error.]

Gail Naughton

Gail Naughton, Histogen

YES: The declining peso value should increase San Diego and U.S. imports but reduce exports as well as tourism to the U.S. and cross-border purchases by those living in Mexico, particularly in the retail area. Tourists in Mexico will benefit, and normally the declining peso would be an attraction to bring U.S. companies and investments into Mexico, something that will probably not occur with proposed penalties promised by the new administration.

Austin Neudecker

Austin Neudecker, Rev

YES: San Diego's economy relies on cross-border commuters, travelers, and business. The devaluation of the peso means U.S. products and services are effectively more expensive to millions of Mexican visitors frequently in San Diego. Mexican businesses will want to shift more business to sell in dollars, but I anticipate only a small percentage will be able. U.S. companies will want to capitalize on cheaper labor, but I anticipate the new administration to create additional barriers, deepening the problem.

Bob Rauch, R.A. Rauch & Associates

YES: San Diego, as a border city, would be impacted by less spending by Mexicans due to the devaluation of the peso, but this is likely to be short-lived. The impact on the U.S. is not as significant. The peso’s devaluation has also increased remittances to Mexico and if exports are impacted by a tariff, this would severely impact Mexico’s economy. But the impact on the U.S. will be felt mostly near the border.

Lynn Reaser

Lynn Reaser, Point Loma Nazarene University

YES: The peso’s loss of nearly one-third of its value during the past year will hurt U.S. and local companies exporting to Mexico and firms competing against Mexican products that will now be much cheaper. These pressures will counter the positive impact on manufacturers or retailers importing Mexican parts or products. In San Diego, retailers, such as those part of Las Americas or Outlets at the Border in San Ysidro, will lose sizable business from Mexican shoppers.

John Sarkisian

John Sarkisian, SKLZ

YES: Along the border and for our local economy the weaker peso will affect consumer and retail spending. The economic climate in Mexico and recent border disruptions if they continue will negatively affect the cross-border flow of goods and services. Should the new administration be successful in implementing increase tariffs, then products from Mexico will become increasingly expensive to U.S. consumers. This will have an inflationary effect on our national economy.

Dan Seiver

Dan Seiver, Reilly Financial Advisors

NO: The fall in the peso, which began before Donald Trump was a candidate for president, was caused by many economic factors, not just a fear that trade between the two countries will be disrupted. Its effects on the U.S. economy will be smaller than the effects on the local economy, but they will be qualitatively similar: Mexican goods will appear cheaper to Americans, especially tourists, while American goods will appear more expensive. Some of this effect will be offset by faster inflation in Mexico.

Chris Van Gorder

Chris Van Gorder, Scripps Health

YES: Mexico is America's second largest trade partner, so a weakening peso will be a headwind to American exporters. The United States imports more goods from Mexico than it exports, so the overall effect on the U.S. economy should be minimal. However, the large currency swings driven by the incoming administration's developing trade policy and the recent fluctuations in oil prices are making it difficult for businesses on both sides of the border to develop long-range strategic plans.